Accounting

Chapter 5- GLOBAL COMPANY PROFILE: Regal Marine world’s 3rd largest boat manufacturer; Regal uses CAD computer aided design; Regal uses JIT inventory to deliver parts as needed. GOODS & SERVICES SELECTION: The good or service provided is basis for an organization’s existence and the key to success; To maximize success, companies focus and concentrate on few products; Companies must look constantly for new products to design; Product Decision- to develop, implement a product strategy that meets the demands of the marketplace with a competitive advantage; Product strategy is 1 of 10 decisions of OM and focuses on developing a competitive advantage thru differentiation, low cost, rapid response, or combination of these. PRODUCT STRATEGY OPTIONS: Product Selection- the choosing of good or service to provide customers or clients; Differentiation- by offering a distinctly unique and high quality product; Taco Bell- has developed a low cost and high value product line; Toyota- a rapid response to changing customer demand; PRODUCT LIFE CYCLES: Intro Phase- the product is being fine-tuned for market, negative cash flow due to research, product development, process modification, and supplier development; Growth Phase- product design is stabilizing, requires effective forecasting of capacity requirements; Maturity Phase- high sales revenue, competitors are established, improved cost control, reduction in options of product line necessary for profitability and market share; Decline Phase- Sales and profits decreasing, can invest to bring good products up, otherwise terminate; Strategies change as products move through life cycle and successful strategies determine best strategy for product on its life cycle stage. PRODUCT-BY-VALUE ANALYSIS- Pareto Principle- focus on critical few, not trivial many; Product by Value Analysis- lists products in descending order of their individual dollar contribution, lists total dollar contribution of product; Contribution- the difference